This paper introduces a model of knowledge sharing of lead users located in a public and
unrestricted community of users. While existing literature on knowledge sharing focuses on
allocation and collaboration processes inside or among companies we extend this to the community
level. We then focus on how key agents — lead users — facilitate knowledge sharing in this setting
and the features that moderate such sharing. Our results show that lead users are central to search
and integration of knowledge from different external sources of relevance to their communities.
Inside the community lead users are active in both “giving and taking” knowledge. Further, as users
build up experience they tend to give more knowledge, thus suggesting a dynamic pattern of
knowledge sharing in which increases in experience make way for important knowledge diffusion
processes in the community.

A corporation’s offshore outsourcing may be seen as the result of a discrete, strategic decision taken
in response to an increasing pressure from worldwide competition. However, empirical evidence of
a representative cross-sector sample of international Danish firms indicates that offshore sourcing in
low-cost countries is best described as a learning-by-doing process in which the offshore
outsourcing of a corporation goes through a sequence of stages towards sourcing for innovation.
Initially, a corporation’s outsourcing is driven by a desire for cost minimization. Over a period of
time the outsourcing experience lessens the cognitive limitations of decision-makers as to the
advantages that can be achieved through outsourcing in low-cost countries: the insourcer/vendor
may not only offer cost advantages, but also quality improvement and innovation. The quality
improvements that offshore outsourcing may bring about evoke a realization in the corporation that
even innovative processes can be outsourced.

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This paper investigates in an exploratory manner the licensing strategies pursued by firms whose business model is based on developing and licensing out their intellectual property rights (IPRs). These are not traditional suppliers, since they do not engage in production or commercialization, but focus solely on invention. While considerable anecdotal evidence exists about these IP vendors, there has been no systematic investigation of how they use licensing to appropriate value from their investments in R&D. In this paper, we suggest that the licensing strategies they pursue can be differentiated along two main dimensions: whether the driving force behind the inventive process is “technology push” or “market pull”, and the degree to which the innovative activities carried out by the IP vendor are mutually dependent upon the innovative activities of the other relevant market players. On this basis, four main licensing strategies are identified. We investigate the relative benefits and costs of these four strategies, and the factors affecting licensing choices.

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This paper investigates in an exploratory manner the licensing strategies pursued by firms whose business model is based on developing and licensing out their intellectual property rights (IPRs). These are not traditional suppliers, since they do not engage in production or commercialization, but focus solely on invention. While considerable anecdotal evidence exists about these IP vendors, there has been no systematic investigation of how they use licensing to appropriate value from their investments in R&D. In this paper, we suggest that the licensing strategies they pursue can be differentiated along two main dimensions: whether the driving force behind the inventive process is "technology push" or "market pull", and the degree to which the innovative activities carried out by the IP vendor are mutually dependent upon the innovative activities of the other relevant market players. On this basis, four main licensing strategies are identified. We investigate the relative benefits and costs of these four strategies, and the factors affecting licensing choices.
Key words: Intellectual property, licensing, strategy
JEL Codes: O31, O32, O34

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The concept of localized learning outlines how local conditions and spatial proximity between
actors enable the formation of distinctive cognitive repertoires and influence the generation and
selection of skills, processes and products within a field of knowledge or activity. The localized
learning argument consists of two distinct yet related elements. One has to do with localized
capabilities that enhance learning while the other concerns the possible benefits that firms with
similar or related activities may accrue by locating in spatial proximity of one another. In this essay,
we disentangle these two inherent elements of the concept, review some of the critique that has
been raised against it, and sort out some misunderstandings that we think are attached to its present
use.

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It has been demonstrated that users occasionally innovate. However, it can now be observed that
even end-consumers act as a source novel product designs. A case study of a firm, and “its”
consumers - from the computer games industry - illustrates how sourcing of consumer knowledge
has enabled the firm to improve product design. Two conditions favor the results firms can obtain
from consumer’s knowledge. First, is firm’s ability to exploit new opportunities of information and
communication technology - on-line communities - to establish interfaces connecting them with
consumers. Second, is firm’s ability to initiate a mode of organization by which the consumers are
guided and motivated to reveal merely relevant knowledge.

This paper examines how individuals select and mobilize local institutions when they transfer
business practices across societies that are construed as dissimilar to one another. We investigate
empirically how the American business practice of socially responsible investment (SRI) was
transferred to France and Quebec. Our analysis identifies five micro-strategies that were employed
to contextualize SRI, namely filtering, rerouting, stowing, defusing, and coupling. This repertoire of
micro-strategies extends previous research on contextualization, translation, and institutional
transfers and links them to one another. They may also help explain why some transfers succeed
while others fail.

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The Roles of Knowledge Sources and Organizational Instruments in MNC Knowledge Management

Foss, Nicolai J; Pedersen, Torben(København, 2003)

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Abstract:

Recent research on the differentiated MNC has concerned knowledge flows between MNC units. While linking up with this literature, we extend in two directions. First, we argue that conceptualizing the MNC as a knowledge structure furthers the understanding of intra-MNC knowledge flows. Thus, we see MNC knowledge elements as being structured along such dimensions as their type and degree of complementarity to other knowledge elements, and their sources, for example, whether they are mainly developed from external or internal knowledge sources. These dimensions matter in terms of knowledge flows, because they influence the costs and benefits of knowledge transfer and, hence, the actual level of knowledge transferred. Second, based on this conceptualization, we argue that MNC management can influence the development, characteristics and transfer of knowledge through choices regarding organizational instruments (control, motivation and context). We test six hypotheses derived from these arguments against a unique dataset on subsidiary knowledge development. The dataset includes information on organizational instruments, sources of subsidiary knowledge, and the extent of knowledge transfer to other MNC units. It covers more than 2,000 subsidiaries located in seven different European countries.

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The Roles of Knowledge Sources and Organizational Instruments in MNC Knowledge Management

Foss, Nicolai J; Pedersen, Torben(København, 2003)

[More information]

[Less information]

Abstract:

Recent research on the differentiated MNC has concerned knowledge flows between MNC units. While linking up with this literature, we extend in two directions. First, we argue that conceptualizing the MNC as a knowledge structure furthers the understanding of intra-MNC knowledge flows. Thus, we see MNC knowledge elements as being structured along such dimensions as their type and degree of complementarity to other knowledge elements, and their sources, for example, whether they are mainly developed from external or internal knowledge sources. These dimensions matter in terms of knowledge flows, because they influence the costs and benefits of knowledge transfer and, hence, the actual level of knowledge transferred. Second, based on this conceptualization, we argue that MNC management can influence the development, characteristics and transfer of knowledge through choices regarding organizational instruments (control, motivation and context). We test six hypotheses derived from these arguments against a unique dataset on subsidiary knowledge development. The dataset includes information on organizational instruments, sources of subsidiary knowledge, and the extent of knowledge transfer to other MNC units. It covers more than 2,000 subsidiaries located in seven different European countries.

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Modularization refers to the opportunity for mixing-and-matching of components in
a modular product design in which the standard interfaces between components are
specified to allow for a range of variation in components to be substituted in a
product architecture. It is through mixing-and-matching of these components, and
how these components interface with one another, that new systems are created.
Consequently, the degree of modularization inherent in a system is highly dependent
upon the components and the interface constraints shared among the components,
modules, and sub-systems. In this paper, a mathematical model is derived for
analyzing the degree of modularization in a given product architecture by taking into
consideration the number of components, number of interfaces, the composition of
new-to-the-firm (NTF) components, and substitutability of components. An analysis
of Chrysler windshield wipers controller suggests that two product architectures may
share similar interface constraints, but the opportunity for modularization of one
module is significant higher than the other due to the higher substitutability of its
components and lower composition of NTF components.

The paper is conceptual, combining project and economic organization literatures in order
to explain the organization and management of market-based projects. It dedicates
particular focus to projects set up in order to facilitate product innovation through
experimentation. It investigates the internal vs. market economies of scale and scope related
to projects, as well as the issues of governance, planning and coordination related to
reaping such economies. Incorporating transaction cost perspectives as well as
considerations of labour markets, the paper explains the management of market-organized
innovation projects by virtue of localized project ecologies and local labour markets of
leaders and boundary spanners. It illustrates its arguments with a case study of the
Recorded Music industry.

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Organizational routines and capabilities have become key constructs not only in evolutionary
economics, but more recently also in business administration, specifically strategic management.
In this chapter we explicate some of the underlying theoretical problems of these concepts, and
discuss the need for micro-foundations. Specifically, we focus on some of the explanatory
problems of collective-level theorizing, and what we think are tenuous assumptions about human
beings. We argue that individual-level considerations deserve significantly more consideration,
and that evolutionary economics and strategic management would be well served by building on
methodological individualism.

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In many emergent markets, cross-industry alliances are necessary to develop and market new
products and services. The resource-based view suggests that firms form alliances to access or
acquire valuable, rare, non-imitable and non-substitutable resources, and that such access
determines the level of profits. Hence, firms confronted with the choice between partners with
strong versus partners with weak resource endowments should choose the former. We contest this
view and argue that firms benefit from allying with weak partners at certain times. In essence, we
suggest that partner selection involves assessing the relative importance of strong resource
endowments and aligned strategic aspirations over time. By adopting an evolutionary approach, we
show that appropriate partner selection criteria are dynamic and may involve allying with weak
partners in the initial exploratory stage, with weak and/or strong partners in the development stage
and with strong partners in the maturity stage. Our findings suggest that the resource-based
understanding of strategic alliances should be extended to include a more profound role for a
partner firm’s strategic aspiration.

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I discuss and compare alternative approaches to integrating bounded rationality with the theory
of economic organization, concentrating on the organizational capabilities approach, which is
strongly influenced by the works of Nelson and Winter, organizational economics, particularly
transaction cost economics, and, finally, a small subset of the literature on biases to judgment
and cognition. I argue that, contrary to the conventional view, both the organizational
capabilities approach and transaction cost economics treat bounded rationality rather “thinly,”
the former being in actuality more taken up with organizational routines than individual
boundedly rational behavior, the latter only invoking bounded rationality to the extent that it
helps explaining incompleteness of contracting. The rich literature on cognitive biases, etc.
suggests a “thick” approach to bounded rationality that may be helpful with respect to furthering
the theory of economic organization. Examples pertaining to the internal organization of firms
are provided.